The trading simulation game emulates the roles of market makers and traders in a security market. The simulation employs a single pool of market-affecting items or electronic versions of the same, allowing random market activity with the benefit of probability-based strategies similar to that of popular card games like blackjack and poker.
The pool of items represents events that affect the final settlement price of the security being traded in the simulation. The events can vary based on the specific market being simulated, but events might include corporate news, economic indicators, legal proceedings, regulatory actions, marketing successes, global events, acts of God, etc. These items and the effects they have can be used in educational scenarios to teach the impact of the events on real market pricing.
The trading simulation begins at a given starting price, and a randomized subset of the pool of items is distributed to the players and optionally to a central depository. Items in the subset are incrementally revealed with rounds of the simulation, modifying the starting price for the security being traded. One or more participants in the simulation may optionally be given the responsibility of offering each round's first bid and ask prices for the security being traded. In each round, all participants simultaneously offer any number of dynamic bid and ask prices without restriction, based on the information each has that no one else has and their own estimates of the final game price. Any player may simultaneously accept an offer from any other player, thus buying and selling the agreed quantity of shares at any agreed price.
Each round ends when participants can no longer reach agreement on a price to trade, and then one or more of the distributed subset of market-affecting items are incrementally revealed. When all rounds of trading are completed, all items are revealed to all players, determining the final game price. Any open positions are closed at the final game price to determine participants' profits and losses. The participant with the most profit is the winner. If multiple participants have the identical highest profit, the game ends in a tie between those participants.
The trading simulation game offers numerous benefits over the prior art mechanisms. By setting a starting price and incrementally modifying that price with market-affecting items, negative prices can be avoided for realism and simplicity. The use of incrementally revealed private and shared items enables advanced probability-based game strategies. As in global markets, there are neither time limits on the rounds nor any restrictions on the offers that can be made, and all players participate simultaneously. The entire simulation can, in at least one embodiment, be entirely represented by a deck of cards with no other pieces or parts. In addition, the novel tally sheet makes tracking trades and calculating profits and losses significantly easier than in any prior art.